Tag Archives: Sraffa Effects

For a number of decades, Arrigo Opocher and Ian Steedman have been developing arguments that apply the CCC to industries and even individual firms. They also draw on mainstream literature in microeconomics, from the 1960s and 1970s. Their 2015 book is a major statement of their position. Since their book's publication, they have continued research in this vein. The CCC applies whenever you see a production function with capital measured in numeraire-units. This can be an aggregate...

A Switch-Point Perturbation Diagram I have a new working paper at SSRN. Abstract: This article presents an analysis based on a comparison of stationary states. With technology and relative markups among industries taken as exogenous, the long-period trade-off between wages and rates of profits is determined. A long-period change in relative markups among industries can create a switch point exhibiting capital-reversing. Around such a switch point, a higher wage is associated with firms...

I have written up my recent explorations in the theory of international trade. Abstract: This article considers a model of international trade in which the number of produced commodities does not exceed the number of countries engaged in trade. Technology is modeled such that each commodity can be produced in each country from a finite series of dated labor inputs. The existence of a positive rate of profits may lead a country to specialize differently than how it would with a zero rate...

This post continues a previous numeric example. The firms in each of three countries are assumed to know a technology for producing corn, wine, and linen. The technology is such that each commodity can be produced in each country. The technology varies among countries. Each of these small open economies can specialize and obtain non-produced commodities through foreign trade. I confine myself to patterns of specialization in which: Each country produces exactly one commodity...

Many - not all - of my recent numerical examples have a certain abstract pattern: At the start of the time under consideration, one technique is uniquely cost minimizing, for all feasible rates of profits. Coefficients of production decline or some markups over the normal rate of profits vary. A fluke switch point appears. Switch points move along the wage frontier, and interesting phenomena occur. These can be other fluke switch points. Reswitching, the recurrence of techniques,...

Recurrence Of Techniques Without Switch Points I have built on my previous post in a writeup: Abstract: In certain models of commodities produced by means of commodities, the choice of technique is analyzed by the construction of the wage frontier. This article presents a numeric example of a continuum of wage curves tangent at a switch point. Technological progress leads to the recurrence of techniques. No switch points then exist, but the cost-minimizing technique varies continuously...

Figure 1: Switch Points Varying with Time1.0 Introduction This post presents a perturbation of a fluke switch point. At this switch point, the wage curves for four techniques are tangent. In the jargon I have been inventing, this is another four-technique, local pattern. In other words, a perturbation of appropriately selected parameters - for example, coefficients of production - changes the sequence of wage curves and switch points on the wage frontier. The perturbation can be viewed as...

I have been looking at patterns of switch points. A pattern is a configuration of switch points helpful for perturbation analysis for the choice of technique. I am curious how the switch points and the wage curves along the wage frontier can alter with parameters, in a model of the production of commodities. Such a parameter can be a coefficient of production; time, where a number of parameters are functions of time; or the markup in an industry or a number of industries. A normal form...

Figure 1: One Way One Technique Can Replace Another The wage-rate of profits frontier (or wage frontier) is calculated with prices of production, given the techniques of production, available in the economy, for producing a given output. Suppose at one point in time, the techniques that lie along the wage frontier consist of the Alpha, Beta, and Gamma techniques, in order of an increasing rate of profits. As time passes, technical innovation alters coefficients of production, including for...

Figure 1: Wage Curves for a Reswitching Example1.0 Introduction This post illustrates another fluke case. In this example economy, two techniques exist for producing a net output of corn. The wage curves for the two techniques have two switch points. One switch point is on the wage axis, corresponding to a rate of profits of zero. The other is on the axis for the rate of profits, corresponding to a wage of zero. This example is a fluke in two ways. In the jargon I have been inventing, it...